Good reporting from the NYT, as usual.
Some of my favorite morsels are below, plus my comments.
"Despite costly efforts to build buzz around new talent and thwart
piracy, CD sales have plunged more than 20 percent this year, far
outweighing any gains made by digital sales at iTunes and similar
services. Aram Sinnreich, a media industry consultant at Radar Research
in Los Angeles, said the CD format, introduced in the United States 24
years ago, is in its death throes. “Everyone in the industry thinks of
this Christmas as the last big holiday season for CD sales,” Mr.
Sinnreich said, “and then everything goes kaput…”
Gerd says: guess there IS hope: once the pain is big enough, changing
seems like a real option, all of a sudden – that is what we are seeing
now. Maybe this ship really has to be steered into the cliffs first,
after all? Call me an optimist but I used to think there were
other options ;). My 2 cents: if you have the guts CHANGE NOW, you can
still own a good chunk of the market, and prosper. But: band-aids are
over – it’s time for real, hard-core changes. Drop copy-protection (at
least for now – until something can be used that is of super-value to
the USER!), tell the users, fans & artists that you screwed up, go
for flexible pricing and bundles, package music into other media, offer
agency-type deals to artists, become completely transparent and drop
the ‘secret sauce’ antics, and start using syndication as the prime
vehicle of promotion, marketing and distribution. It’s not the COPY – it’s the ACCESS. It’s not Prevention – it’s Participation.
NYT: "For the companies that choose to plow ahead, the question is how to
weather the worsening storm. One answer: diversify into businesses that
do not rely directly on CD sales or downloads. The biggest one is music
publishing, which represents songwriters (who may or may not also be
performers) and earns money when their songs are used in TV
commercials, video games or other media…"
Gerd says: ok, now, I have talked about this until the cows came
home, but here is again: switch to music as a service. Again: never
mind the copies – the next big thing is offering ACCESS. Brands.
Experiences. Added Values. Stuff that only you can provide – together
with the artists. Values and experiences can’t just be downloaded.
NYT: "But very few albums have gained traction. And that is compounded by the
industry’s core structural problem: Its main product is widely
available free. More than half of all music acquired by fans last year
came from unpaid sources including Internet file sharing and CD
burning, according to the market research company NPD Group. The
“social” ripping and burning of CDs among friends — which takes place
offline and almost entirely out of reach of industry policing efforts —
accounted for 37 percent of all music consumption, more than
file-sharing, NPD said…."
Gerd says: sounds like an obvious problem – it’s all out there for
free so they stopped buying. But the thing is that this is not the real
problem. ‘Free distribution’ is a blessing not a curse, and P2P /
Super-Dustribution will emerge as the main mechanism for digital
distribution in the next 3 years (and not just for music). Rather, it
is – still seriously counter-assumptive, and beyond grasp of
most of the incumbents of ‘music1.0’ – the unfailing desire to, at any
cost (including self-destruction), want to control the ecosystem that
the large music companies must keep in check – and then we can understand and monetize what people actually do
with technology. They are doing this because they like the music and
the artists, not because they want to do as much damage as they can –
YOU simply have not given them good enough options to act differently.
If the model of uber-control over music distribution isn’t working
any longer, wouldn’t it make sense to try to come up with a new model?
Lesser control does not mean zero revenues. There is life after selling
expensive copies of plastic, or indeed of 0s and 1s. Trust me.